[Volume XXV
THE CHICAGO BANKER
20
TOM RANDOLPH, President ALBERT N. EDWARDS, Vice-Prest. EDW ARD HIDDEN, Vice-President W. L. McDONALD, Vice-President L. B. TEBBETTS, Vice-President THOS. W. CROUCH, Vice-President HENRY KOEHLER, Jr., Vice-Prest. W C. FORDYCE, Vice-President J. M. WOODS, Secretary L. S. MITCHELL, Treasurer A. G. DOUGLASS, Asst. Secretary R. L. GURNEY, Mgr. Savings Dept. W. V. DELAHUNT, Trust Officer ROBT. H. CORNELL, RI. Est. Officer BRYAN & CHRISTIE, Counsel
COMMONWEALTH
TRUST COMPANY, ST. LOUIS
^ Accounts of Banks and Bankers receive special attention. Collections promptly made and remitted. Corporation and individual accounts solicited. Special departments for handling Estates, Trusts, Real Estate, Bonds, Farm Loans and Mortgages.
Resources over Fifteen Millions
Capital and Surplus $5,500,000
Joseph T. Talbert to the Ohio Bankers
and necessity to seek improvement, our system has become what it has rightly been called—“the worst in the world.”
Indeed, it is no system at all. It is a patch-work, wrought out of painful experiences more or less akin to those through which we have just passed and which, unhappily, has given us this latest proof of national incompetency in matters of financial legislation. The panic of 1873 brought to an end the inflation oi paper currency. Then came the resumption of specie payments. The repeal of the Silver Purchase Act ended the panic of 1893 and brought about the firm establishment of the gold standard. Under this our prosperity arose and flourished for a time as it had never done before. The panic of 1907 has brought no improvement in the existing system which will be helpful to general business or which should be accepted as permanent reform. But it has given as a temporary addition to our currency laws an emergency measure which, while not capable of preventing a panic, may at least serve to mitigate its violence should we have the misfortune to suffer that experience while the law remains upon our statute books. In view of recent experiences I dare say, however crude this measure may be, there are few bankers who would not readily have taken out currency notes under it during November and December last, and who would not agree now that it is far more comfortable to know in a time of panic that currency can be had at a price, however dear it may be, than to labor under the fear and anxiety that it cannot be had at all. This much is helpful and on this theory alone we should be willing to accept the measure, to overlook most of its crudities and faults and to give it a fair trial. But it is weak and disappointing and leaves so much to be desired that it seems necessary to have attention drawn to its weaknesses and defects in order
Member of the Currency Com-mission of the A. B. A. ¿ives his views on the New Currency Law at the Alexandria Bay Convention
L nhappily the tide of this prosperity often has been turned by panics and financial crises. Nearly always resulting in part, if not wholly, from defects in our monetary laws, these crises in most cases were as unnecessary as they were costly and painful. Considered from a financial point of view our country could better afford the frightful cost of periodical warfare than to permit the people to endure the agonies and to suffer the losses of periodical panics. Their cost and their national effect are beyond computation. As rich and populous as our country is; nearly unlimited in possibilities of domestic development and in the expansion of foreign trade; high in the average intelligence of its citizenship, we are entitled to have as good a monetary system as there is in the world, and if we expect successfully to compete with rival nations for the world’s trade, and to enjoy freedom from recurring crises, it is necessary that we should have it. Possessed as . we are of ample supplies of gold to serve as a foundation upon which to build, and with abundant means to provide a sound superstructure of credit, it is surprising that we should refuse to profit by the_ experiences of other great commercial nations, obstinately shut our eyes to the truth and permit our monetary system to develop only out of political necessities and national crises. Step by step this has been done through a series of legislative makeshifts and compromises, seven or eight in number, including practically every important constructive law relating to our currency which has been enacted during the past" fifty years. Blinded by prejudice, moved only by suffering
No laws are more important to a nation, because none involve more directly the welfare and prosperity of its people and none more vitally affect the interests and happiness of every citizen, than those which relate to its monetary system. A country’s currency not only bears directly upon the daily dealings of its citizens, one with another, but through its possible influence upon the stock of gold, it may also affect the status of that nation’s trade with the whole world.
Despite its tremendous importance there is in our country no subject of a business nature upon which there are such diversities of opinion, so much prejudice and confusion of thought, as upon the question of sound money. This confusion pervades the minds of bankers and legislators, as well as of business and professional men, and it multiplies the difficulties in the way of reforms in our monetary laws. W ithout a sound and adequate system, permanent prosperity, the stability of trade and the integrity of financial institutions are not possible. The money of a nation is the life blood which flows through the veins and arteries of its commerce. As well might we expect the human body to thrive with diseased and disordered blood as to expect the business . of a nation to prosper, and its trade to flourish with an unsound and inefficient currency.
It is a humiliation to us in the sight of the civilized world, a hindrance to our commercial prestige, a constant menace to prosperity and a perpetual bar to our financial supremacy that we have so long declined to have faith in, and freely to use "the most approved and highly developed instrument of trade, a properly safeguarded pure bank note. Weighted as we are by this self-imposed but heavy and costly handicap, nothing but indefatigable industry and boundless resources could have brought to us the periods of national prosperity which we have enjoyed.